No Simple Cure

Candidates Offer Plans To Reform Health Care System

April 19, 1992|By Rogers Worthington.

Under Brown`s plan, the governnment would be the single payer of hospital bills, replacing some 300 insurance companies. Brown says this will eliminate mountain-size spools of red tape and paper, while giving everyone the high-quality care of his choice. The $67 billion he and the General Accounting Office estimate would be saved by eliminating the insurance companies`

duplicative roles could be used, he says, to cover the more than 35 million uninsured Americans, and perhaps even eliminate deductibles and co-payments for everyone else. (An estimated 80 percent of the uninsured are in households in which at least one member is employed.)

Every citizen would carry a credit card-style medical card, but the bill would go to the government. Until tax time, that is, and there`s the rub. Some estimates, which don`t factor in the $67 billion in estimated savings, see the annual tab running at $200 billion to $300 billion a year, about $2,000 for every household. Brown said he would fund the program by cutting military spending, but some type of tax increase probably would be necessary as well.

Brown would stress preventive health care, in hopes of cutting the need for heart bypass operations, lung cancer therapy and other expensive procedures.

Presumably, the single payer-the federal government-would be given the authority to control costs. Brown`s plan mentions nothing about how to pay for long-term care for the elderly and disabled, or the unemployment and other problems that could develop in what is left of the health insurance industry. Liberals on the health care issue say a national plan is the only way to provide full coverage for all Americans, while at the same time allowing them the freedom to choose their doctor and hospital.

Critics say it would cause pressures on quality, delays in service and provide no greater guarantee of cost containment than the present system.

Bush: Voucher

Bush`s plan is a subsidized marketplace approach. Some 95 million moderate- and low-income Americans would be given health insurance tax credits (vouchers) or tax deductions. Uninsured singles at or below the poverty line would get up to $1,250, couples $2,500 and families of three or more $3,750.

So a family of four earning $14,000 would get $3,750-enough to buy special low-cost group health insurance plans. Under the Bush proposal, states and insurance companies would develop those plans. Health insurers would have to insure all, with renewal guaranteed. People with pre-existing conditions initially would pay higher premiums-perhaps 50 percent higher in some cases-but that would be eliminated eventually.

The tax credit scales down dramatically for those above the poverty level. An uninsured family of four earning $21,000 would get a credit of only $375. So it would make more sense for them to take the full tax deduction of $3,750, but they would no longer be eligible for the special insurance plan.

However, any employer contribution to their insurance would be subtracted from the tax deduction. For example, a family of four with a modified gross income up to $70,000 receiving a $2,000 employer contribution could deduct only $1,750.

Self-employed people could deduct the entire cost of their health insurance. Current law allows only a 25 percent deduction.

The president`s plan would control costs by creating more market competition and encouraging large purchasing pools. In addition, it endorses more managed or coordinated care, such as participation in preferred provider organizations (PPOs) and HMOs-all of which limit a patient`s choice of physician and facility.

The funding for Bush`s $40 billion plan (some estimate it at $100 billion) remains a mystery. One approach mentioned would reduce the federal share of Medicaid by placing a ceiling on the annual growth rate of payments to states. Another would add a tax to the health care premiums paid by employers and employees.

Critics say fewer than a third of the uninsured would be eligible for the maximum credits, and the credits and deductions for those above the poverty line would be trivial (insurance for a family of four soon will be more than $5,000). The plan would do little, they say, to control costs or eliminate administrative waste. It is, said Richard Dreyfuss, a spokesman for the Public Citizen Health Research Group, ``a hodgepodge of things the insurance industry wanted.`` The group supports a single-payer, Canadian-style system.

Legislation is being prepared for the Bush plan. Meanwhile, pressure is building on Congress to pass some kind of health care reform plan. But there is no consensus among the leadership.

``If we don`t do something about this in the next two or three years, I think . . . we are going to be handed a single-payer (Canadian style) system by an infuriated American public,`` Sen. Rockefeller said at a recent health care forum in Boston.